AXA Real Estate has illustrated its faith in the Japanese economy with the launch of a specialised debt investment vehicle, raising an initial Yen15 billion ($175 million).
The primary investment into the vehicle has come from a Japan-based AXA Group insurance company and the firm expects additional flow from other insurance subsidiaries and third party institutions.
The Japanese Commercial Real Estate Debt Investment vehicle will focus on newly originated senior loans backed by prime commercial real estate assets in the Greater Tokyo region.
AXA Real Estate said the vehicle would invest directly or with banking syndicates in loans of between three and ten year terms, on a floating or fixed rate basis with spreads between 200 and 250 basis points above TIBOR.
"The fact that many banks in the region still have limited capacity to lend on commercial real estate remains unchanged and this presents a clear opportunity for us to satisfy some of the significant demand in the region, while delivering value for our investors," said Frank Khoo, global head of Asia, AXA Real Estate.
AXA Real Estate's in-house team based in Japan, supported by it lending specialists, will manage the vehicle.
"With initial equity now in place, we hope to secure further commitments shortly from investors who are keen to access the attractive risk adjusted returns," said Tetsuya Karasawa, head of Japan business development, AXA Real Estate.
AXA said it believes that the Japanese economy will recover in a relatively short space of time and that investors should focus on its long-term prospects, rather than the short-term impact of recent natural disasters.
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